Bitcoin ATM fraud is soaring, FTC warns. Here's how the scams work.

Financial scams take many forms: a prominent technology company purportedly warning you that your online account has been hijacked, or someone impersonating a bank executive claims there have been unauthorized charges on your credit card. More elaborate schemes might involve AI and phony law enforcement officials offering to "help" you with your predicament — all you need to do is hand off stacks of cash to an anonymous driver outside your home.

One obvious red flag? Such fraud increasingly involves a so-called bitcoin ATM, according to the Federal Trade Commission. The kiosks, known as bitcoin teller machines (BTM) and often found in places like convenience stores, bars and gas stations, resemble conventional ATMs. But instead of letting you withdraw cash, users can typically buy or sell cryptocurrency using cash as well as debit or credit cards. Another difference is that BTMs are linked to a digital wallet, rather than a bank account. 

In 2023, consumers reported $114 million in losses from scams involving BTMs — a nearly 900% increase over the preceding three years, the FTC said Tuesday in a report. Losses through June of this year are around $66 million, a sign the trend is only growing, while the median amount people lost was a whopping $10,000.